After passing the stress tests conducted by the Federal Reserve, major Wall Street banks have raised their dividends and restarted their share buyback programs.
On Wednesday, the results of the stress tests conducted by the Federal Reserve showed that all 23 major U.S. banks are able to withstand severe global economic recession and turbulence in the real estate market. This has created conditions for these banks to return billions of dollars to investors through dividends and share buybacks.
Fidelity, State Street, Morgan Stanley, Goldman Sachs, and JPMorgan Chase have all raised their dividends. Specifically:
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Fidelity Bank plans to increase its quarterly dividend from $0.30 per share to $0.35 per share; State Street intends to raise its dividend by 10% to $0.69 per share in the third quarter, while still planning to continue its share buyback program as scheduled;
Morgan Stanley has raised its dividend to $0.85 per share and authorized the restart of a $20 billion share buyback program; JPMorgan Chase plans to increase its third-quarter dividend to $1.05 per share;
BNY Mellon has raised its quarterly dividend by 14% to $0.42 per share; Truist plans to maintain its quarterly stock dividend at $0.52 per share;
Goldman Sachs has seen the largest increase in dividends, from $2.50 per share to $2.75 per share; Citigroup has the smallest increase among its peers, raising its quarterly dividend from $0.51 per share to $0.53 per share.
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It is worth noting that Citigroup was prompted to accumulate capital under stricter requirements last year. Subsequently, the company announced the continued suspension of share buybacks while considering the divestiture of its retail banking division in Mexico. The company restarted its buyback program in the second quarter of this year and changed its plans to list the division. Unlike most major competitors, Citigroup will face higher capital buffer pressure in the coming quarters.
Analysts believe that banks' capital return plans for this year may be more conservative, as international banking regulations are expected to raise the capital levels that global banks like JPMorgan Chase need to maintain.
At the same time, there are many reasons why banks hold capital. In response to the Silicon Valley Bank's collapse in March, as well as the potential economic recession, the banking industry may face increased future loan losses.

Wall Street's major banks have raised dividends and restarted buybacks. Goldman Sachs has seen the largest increase in dividends, from $2.5 per share to $2.75 per share. Citigroup, on the other hand, has the smallest increase in the industry, raising its quarterly dividend from 51 cents per share to 53 cents per share.

After the stress test, "Good news keeps coming": Wall Street major banks collectively raise dividends.